'Good value in Buy To Let Mortgages market' despite rate rises
Interest rates are to rise by 0.25 per cent to 5.5 per cent, it was announced by the monetary policy council (MPC) today - a move that was widely expected.
Recent figures showed that rate of inflation rose to 3.1 per cent in March - outside of the target zone - prompting most analysts to predict that the 0.25 per cent rise would take place this month.
However, some experts believe that interest rates have now reached their peak, including Trevor Williams, chief economist at Lloyds TSB Corporate Markets, who said another rise would "only be justified if inflation continues to drift further beyond target".
Mr Williams referred to the MPC's decision for a 0.25 per cent rise as 'sensible', stating that inflation is expected to start falling back to its two per cent target by the end of the year.
Alliance & Leicester's director of mortgages Stephen Leonard pointed out that competition in the buy-to-let mortgage market is intense and consequently there are some good value rates still available.
He commented: "With the rate rise, landlords will have to consider either charging the tenant more, or increasing the level of deposit they put down on a property in order to make the economics work for them."
Buy-to-let 'has made renting socially acceptable'
Buy-to-let mortgages have improved the standards of lettings property and made renting a home socially acceptable again, an industry body has claimed.
According to the Association of Residential Letting Agents (Arla), although buy-to-let as a sector has seen steady rather than "dramatic" growth of around three per cent, it has "rescued and revitalised the private rental sector".
Spokesperson for Arla, Malcolm Harrison, said that the invention of buy-to-let mortgages has refinanced a large part of the private rental sector, brought in good landlords and made it more competitive.
He commented: "It's been vitally important for the private rental sector; it's made renting virtually acceptable again."
Mr Harrison also claimed that the advent of buy-to-let had seen a change in culture, whereby people are not in such a hurry to get onto the property ladder, with tenants staying longer on average in rented accommodation.
This is one of the factors contributing towards a "buoyant, sustainable" buy-to-let sector, he commented.
Recent figures from Paragon indicate that the total returns generated by buy-to-let landlords reached their highest level in five months in March.
Landlord Mortgages Whilst Buy To Let Mortgages have become competitive in recent times so has the Buy To Let market. Landlords have raised their game in order to let their properties and this trend will continue. Tenants are demanding that properties are well presented prior to letting.
HMO Buy To Let Licence Definition
A House of Multiple Occupancy is deemed to be so if it comes into one of the following catagories.
A house or flat let to 3 or more tenants that are classed as 2 or more households sharing facilities.
A house converted solely into bedsits and is let to more than 2 tenants constituting 2 or more households sharing kitchen or bathroom.
2 or more households sharing a converted house that has one or more flats that are partially self-contained, i.e. no kitchen or bathroom.
If a converted building converted building did not meet 1991 Building Regulations and is used for self-contained flats of which more than a third are short term lets.
To be an HMO it should be used solely or mainly to house tenants and it should be their only or main residence. Properties that are let to students or migrant workers or used as domestic refuges will be classed as their only or main home
